Hyundai Motor reports record quarterly earnings

South Korea's Hyundai Motor left other carmakers in the dust in the third quarter, posting record earnings on the back of strong gains in market share in China and the US, the world's two biggest car markets.

The strong results will enable Hyundai to challenge Germany's Volkswagen as the world's most profitable major carmaker as the global auto industry struggles to emerge from its worst downturn in decades.

Hyundai, together with affiliate Kia Motors, overtook Ford Motor to become the world's fourth-largest carmaker by sales in the first half of this year.

Sales in China jumped by 88 per cent in the first nine months, more than double the industry's overall increase. Its market share rose to 7.2 per cent from 5.5 per cent a year earlier, putting it ahead of the three big Japanese carmakers, Toyota, Honda and Nissan.

In the US, Hyundai's sales rose by 1.3 per cent in the first nine months, making it the only carmaker apart from Kia and Japan's Subaru to post an increase. Its market share rose from 3.1 per cent to 4.4 per cent. The Koreans have benefited from the weak won which, despite a rally over the past six months, remains well below its level against the dollar in recent years.

Hyundai drew attention in the US this year with an offer, known as Hyundai Assurance, that allows buyers to return their cars without penalty or loss of creditworthiness if they lose their job or declare personal bankruptcy within a year of purchase.

Its cars have for the first time reached the top 10 rankings of Consumer Report , an influential consumer publication. Motoring writers voted Hyundai's Genesis luxury sedan North American car of the year. It has also stepped up low-margin sales to car-rental companies and other fleet operators.

It was one of the main beneficiaries of the US government's cash-for-clunkers scrappage incentives.

In Europe, Hyundai has also benefited from scrappage schemes. Its sales were 23.5 per cent higher than a year ago in January to September, according to the carmakers' association Acea.

Third-quarter net earnings tripled to Won979bn ($820m) from Won265bn a year earlier. Operating profit jumped more than five-fold to Won587bn. The company cautioned that the strengthening won and higher oil prices could dent future earnings.